IRA Charitable Rollover

The IRA charitable rollover, which was renewed on December 19, 201, allows individual taxpayers older than 70 ½ years to donate up to $100,000 from their individual retirement accounts (IRAs) and Roth IRAs to charitable nonprofits without having to treat the withdrawals as taxable income. The charitable giving incentive expired on December 31, 2014 and must be renewed by Congress before individuals may utilize the incentive. The Council of Nonprofits supports the extension and expansion of the IRA charitable rollover. To learn more, please visit our site on the America Gives More Act and the Supporting America’s Charities Act.

Why It Matters

The IRA rollover offers older Americans the opportunity to give back to the causes they support in their communities without suffering adverse tax consequences. The giving incentive is of particular value to individuals who do not claim itemized deductions on their tax return because the funds are sent directly to nonprofits from IRA accounts and are never counted as income.

Where We Stand

The National Council of Nonprofits is committed to supporting existing, enhanced, and new tax and other incentives at the federal level that encourage individuals to volunteer their time and contribute money to the missions of nonprofits and opposing caps or limits on charitable giving incentives.

Status

Congress restored the IRA Charitable Rollover and dozens of other expired tax provisions in December 2014. While made retroactive to the beginning of 2014, the late passage of the law effectively gave individuals barely two weeks to make contributions from their Individual Retirement Accounts before the incentive expired again.

Legislative language to make the IRA rollover permanent was included in the America Gives More Act that was passed by the House in July 2014 and in the Supporting America’s Charities Act that failed in December 2014. It is expected to be made permanent in any future tax reform. To learn more, please visit our site on the America Gives More Act.

The Public Good IRA Rollover Act was introduced in 2013 in the Senate (S.1772) but was not enacted in the 113th Congress. The legislation would have extended the giving incentive that allows older Americans the opportunity to give to nonprofits directly from their individual retirement accounts without tax penalties. It also would lift the cap from the current $100,000 per year, reduce the age at which a person could make donations to nonprofits from 70 ½ to 59 ½, and expand the eligible organizations that could receive the rollovers from public charities also to include donor-advised funds.

What Nonprofits Can Do

Nonprofits should reach out to their Senators and Representatives and let them know how the IRA Charitable Rollover has enabled them to address needs in their communities.